# Predetermined Overhead Rate Calculator

> Set the rate used to apply manufacturing overhead to jobs for the coming period.

Page: https://freecalculator.tech/tools/predetermined-overhead-rate-calculator
Last reviewed: 2026-09-15

## Formula

Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total allocation base

- Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total allocation base.
- Inputs used: Currency, Estimated manufacturing overhead, Estimated allocation base, Actual base used so far (optional).
- Edge handling: Estimated manufacturing overhead is required.; Estimated manufacturing overhead cannot be negative.; Estimated manufacturing overhead must be no more than 1000000000000.; Estimated allocation base is required.; Estimated allocation base must be greater than zero..

## Inputs

- Currency
- Estimated manufacturing overhead
- Estimated allocation base
- Actual base used so far (optional)

## Worked example: $600,000 of overhead over 40,000 machine hours

A planning rate of $15.00 per machine hour.
1. Start with Currency: USD, Estimated manufacturing overhead: 600000, Estimated allocation base: 40000, Actual base used so far (optional): 38500.
2. Apply the method: Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total allocation base.
3. A planning rate of $15.00 per machine hour.

## Common questions

### Where does this formula come from?

OpenStax, Principles of Accounting Volume 2: Managerial Accounting, job order costing. See the source link on this page.

### What kind of calculation is this?

Budgeted overhead for the period divided by the budgeted quantity of the chosen allocation base. Check the formula, example, and limitations on this page before using the result for a real professional & industry decision.

### What are its limits?

A planning rate. Actual overhead will differ, producing over- or under-applied overhead.

### How do I use the Predetermined Overhead Rate Calculator?

Enter the required values for Currency, Estimated manufacturing overhead, Estimated allocation base, Actual base used so far (optional). The calculator applies the formula on this page and shows the main result with any supporting breakdown so you can check the arithmetic.

### What formula does the Predetermined Overhead Rate Calculator use?

Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total allocation base The visible formula section above lists the calculation path and the edge cases the page handles, so the result can be checked without relying on the form alone. Check the formula, example, and limitations on this page before using the result for a real professional & industry decision.

### Can the Predetermined Overhead Rate Calculator be used for exact decisions?

Use it as a calculation aid, not as a substitute for checking the underlying rule, contract, policy, or professional advice that applies to your situation. When a result depends on local rules, personal details, prices, or dates, enter those values yourself and confirm them before acting.

## Limitations and assumptions

- Inputs outside the supported range are rejected rather than forced into a result.
- The result depends on the values you enter for this predetermined overhead rate calculator; it does not supply missing rates, rules, prices, dates, or assumptions for you.

## Sources

- OpenStax — https://openstax.org/books/principles-managerial-accounting/pages/1-introduction

## Cite this page

- APA: Free Calculator. (2026, September 15). Predetermined Overhead Rate Calculator. https://freecalculator.tech/tools/predetermined-overhead-rate-calculator
- MLA: "Predetermined Overhead Rate Calculator." Free Calculator, 15 Sept. 2026, https://freecalculator.tech/tools/predetermined-overhead-rate-calculator.
- Link: Predetermined Overhead Rate Calculator — Free Calculator, https://freecalculator.tech/tools/predetermined-overhead-rate-calculator